Texas power issues. Wind farms getting iced up (Part II)... 38

[Fischstabchen]

1503,

I am not familiar with your example. Renewables want to offer firm service which they can get a higher premium for. Some wind farms had developers proposing putting big propane tanks on site to provide power when needed to meet the requirements of firm service. I am not familiar with the money numbers but it must be significant enough to bother with dumb stuff.

 

[waross]

There is a large co2 loss associated with using crude oil as the source for the energy to upgrade and refine petroleum products.
It's cheap.
If we are willing to pay to reduce our carbon discharges, there is about a 40% reduction available by using alternate energy rather than crude oil to drive the upgrading and refining processes.
If only one producer did this he would be at a financial disadvantage.
If all producers did this then no one producer would have a great advantage over the others.

Bill
--------------------
Ohm's law
Not just a good idea;
It's the LAW!

 

[1503-44]

Yes dumb ideas can be the order of the day at times. I was once on an Indian reservation somewhere outside Moapa, NV, trying to talk the chief into building a giant tomato greenhouse to use the heat from a large HRSG, all because Enron wanted to build a cogen there. That was one of the better ideas. Another involved reversing 40 miles of gas pipeline that was actually going to carry 60% natgas and 40% N2 to another new cogen and food processing plant somewhere in SE Colorado. Fortunately neither made it make off the proposal board. The gas wells there produce a lot of N2 for some reason. But then again, some farther to the south produce a lot of He2.

 

[1503-44]

If solar ever gets to really going strong, power might become more expensive at night.
I need a break.

 

[LionelHutz]

Fischstabchen, I know what pumped storage is. You obviously missed the point of what I posted.

 

[1503-44]

If nobody else, I appreciated hearing about the gravity storage rock. Definitely thinking outside the box and it just might come in handy. That's exactly the kind of thinking we need, even if it never actually flies.

BTW, I forgot that the UAE just got their reactor going. Not that they need it yet, but they will be ready if they do. Always best not to get behind the 8 ball.

 

[FacEngrPE]

Pulling rail cars up a hill is another energy storage idea.

https://aresnorthamerica.com/

I doubt it will scale to the size range covered by pumped hydro.

 

[1503-44]

Anywhere you can store potential. Any truth to the Swiss giant clockspring?

 

[cranky108]

Yet many times I have seen loaded coal trains traversing town using full dynamic brakes, after climbing a 7200 foot hill to a level a little less than 6000 feet.
The problem is the towns in the middle.

 

[Alistair_Heaton]

https://www.statesman.com/story/new...ed-54-million-during-texas-freeze/6926083002/

Some interesting numbers being thrown about.

 

[Fischstabchen]

These two paragraphs I thought were interesting.
"
\The city's $54 million net revenue estimate was included in a voluntary notice filed Monday with the Municipal Securities Rulemaking Board. The disclosure did provide for a considerable deviation from that estimate, however, suggesting the final revenue total could reach as high as $104 million but also drop all the way to negative $16 million depending on market developments.

"There is already movement to begin repricing some aspects of the market, and ERCOT has begun significantly short-paying invoices owned to Austin Energy because of cash-flow issues caused by payment defaults by other parties in their payments owed to ERCOT," the report read."

Imagine selling something like cotton or corn onto the market and then Chicago coming back and telling you they could give only this much money or even worse, tell you you owe them money.

This is in addition to early on when the Governor locked in prices to $9,000 per MWH and declared transaction already settled to be settled at $9,000 even though the market never settled at that price point. I would be pretty mad if I was Brazos , the utility that declared bankruptcy, or a wholesaler and had to pay post-settlement adjust markups.

 

[dik]

Sounds like a totally F'ed up system... time to change and join the 21 century.

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[Fischstabchen]

dik,

It is a 21st century system that relies on the market to fix any issues. The cap was $3,000 and then 5,000, and $6,000 and so on. It kept being raised to no one wanting to build peaker generation with such a low return. In other regions, like CAISO, facilities are paid simply for being capacity. You usually are comfortable with a capacity margin around 9% and California is flying by 13%+. There are plants being built there which may not or just barely run. The cap was put in place because of market power manipulation by Enron and it was being relaxed to try to incentivise Independent Power Producers to build plants. I am not defending the system but that is the system here in ERCOT. The garbage with prices being changed and such is just fallout of the market failing due to systemic problems with the natural gas system. Without systematic failure, the prices would never have stayed as high as they were for an extended amounts of time.

Edit: I should have included that the market was being set by the PUC.

 

[dik]

Life threatening issues should not rely on the market...

Rather than think climate change and the corona virus as science, think of it as the wrath of God. Feel any better?

-Dik

 

[waross]

Imagine selling something like cotton or corn onto the market and then Chicago coming back and telling you they could give only this much money or even worse, tell you you owe them money.

Canadian Wheat board,
The Fruit Growers Association in BC.
I think that there is precedent.

Bill
--------------------
Ohm's law
Not just a good idea;
It's the LAW!

 

[1503-44]

Both Chicago Mercantile and NYSE have several levels of price change circuit breakers set each day.
The largest is 20% price cap for the day.
Nowhere near ERCOT's 10,000% price change.
Why are these guys not in prison yet?
Raising prices during declared emergencies is plainly illegal.

 

[Fischstabchen]

1503-44,

It isn't illegal. The PUC abandoned the market and just flat set prices at the max to spur every generator to come online. All without thinking of the groups that buy power. Prices on the first day were around $1,200 per MWH. The PUC felt that if there was load shed happening that market forces weren't incentivising generation to come online even though $1,200 is around 40 times the normal market rate. They then set the price to the max due to the belief it should be maxed out if there is shed load.

https://www.wsj.com/articles/texas-...ates-criticism-11614268158?mod=article_inline

Order to set past and present prices to max by the PUC to ERCOT.

https://www.puc.texas.gov/51617WinterERCOTOrder.pdf

 

[1503-44]

I think the legal questions are not fully resolved. There are no courts decisions yet.
I know of PUC's actions. If they knew anything about their market, they would have realised their decisions were in error.

The market did not fail because of gas supply problems. There is no way that a 300% rise in gas prices should result in 10,000% increase in electricity.
The market did not fail because of electrical supply problems. That resulted in grid blackouts, as designed.
The market failed because supply of electricity could not be made to meet demand AT ANY PRICE.
When supply and demand cannot be balanced by price, any market is effectively destroyed. This one went ballistic, totally out of control. PUC fueled the boosters.
The market failed from lack of appropriate controls, most certainly while under declared emergency.
The price of Bitcoin always balances supply with demand, because supply and demand can always balance the price of Bitcoin. But this ain't bitcoin. The problem is that PUC thought it was.
That's it, plain and simple...IMO.

Aside from gas fields freezing, some downed power lines and some generators that need winterizing, this has little to with any kind of engineering failure, as everything seems to have operated as designed. The only engineering failure as such, might be insufficient design envelopes, yet some argue that they are sufficient, since extending them are too expensive to be practical and cost effective. So far its mostly a mission failure only.

Does anyone doubt these simple market principles? I think it is pretty much Economics 101, but I'd like to hear any contrary opinions.

 

[RedSnake]

I have tried to figure out how ERCOTS rules are configured but it is hard to get a clear picture.
Some seems to be the same as the ones we use her.

But this difference in cost for power during the blackout between the market and the costumers can be because the power providers that could not deliver have to pay ERCOT for power bought on the market for them.
But if the power provider has costumers with fixed prices then they can't charge them with this extra high power prices.
The only one they can charge to get the money back is the ones that don't have a fixed price.

But here it is different, when I pay spot price I pay the markets spot price not some made up spot price that the power providers coms up with.
And in our system there is never a good idea for power providers not to deliver what he has sold to the grid (consumers) because the only thing that will happen is that he is in debt to "ERCOT" with the same amount of power and have to deliver it later without extra cost, its just plus or minus on the balancing sheet.
If "ERCOT" have to buy from someone else to fix the problem then the bill goes to the PP with extra cost, for fixing it, but this is not market spot price and can't be sent down the line to the consumer.

Here using the pre bought power reserv never influences the market price either since it is bought and payed for after market closing.

So I am not shore what is lacking here or where there is a glitch in the system, something is missing.

Best Regards A


“Logic will get you from A to Z; imagination will get you everywhere.“
Albert Einstein

 

[1503-44]

Maybe you are not sure, because there was no electrical problem, The grid remained balanced, because demand was restricted by enforced blackouts. Setting a higher price did not bring on more gen capacity, like it was theoretically supposed to do. We know that because blackouts persisted at extreme price. The grid was only saved by enforced blackouts, not by high prices or more electricity being brought online.

So what was the benefit of the high prices, other than lining pockets of those that were already injecting into the grid? No more generators showed up at that party.

How would the Swedish electricity market respond when enough power cannot be provided to meet demand? <assuming interconnections at borders are closed off, I.e. supply is finite, demand is effectively infinite.>